Supreme Court Allows Discharge Of Former Minister, Finds No Material To Attract Prevention Of Corruption Act

A bench of Justices Sudhanshu Dhulia and K. Vinod Chandran heard the appeal by a former Minister in the Gujarat government challenging the High Court's refusal to quash criminal proceedings arising out of the grant of fishing contracts in State reservoirs. The petition assailed summons issued under the Prevention of Corruption Act, 1988, on the contention that there was no material showing demand or acceptance of illegal gratification by the appellant.

The Court allowed the appeal and directed that the proceedings against the second accused (the appellant) be dropped, holding that the record did not disclose the essential ingredients of offences under Sections 7 or 13 of the Act. The Court emphasised that proof of demand and acceptance of illegal gratification was a "sine qua non" to establish guilt under the Act and that the statutory presumption under Section 20 could not arise without such proof. The Court, in its reasoning, observed: "88.1. (a) Proof of demand and acceptance of illegal gratification by a public servant as a fact in issue by the prosecution is a sine qua non in order to establish the guilt of the accused public servant under Sections 7 and 13(1)(d)(i) and (ii) of the Act. ... 88.5. (e) The presumption of fact with regard to the demand and acceptance or obtainment of an illegal gratification may be made by a court of law by way of an inference only when the foundational facts have been proved by relevant oral and documentary evidence and not in the absence thereof. ... 88.7. (g) Insofar as Section 7 of the Act is concerned, on the proof of the facts in issue, Section 20 mandates the court to raise a presumption that the illegal gratification was for the purpose of a motive or reward as mentioned in the said Section."

Background The dispute arose when fishing rights in State reservoirs were allotted without inviting tenders; a trader who later participated in a court-mandated tender process challenged the earlier allocations. The Gujarat High Court quashed the impugned grants and directed the State to re-allocate by tender, after which the complainant alleged that the earlier peremptory grants produced substantial loss to the State and reflected corrupt intent by public servants. A subsequent investigation by the Anti-Corruption Bureau produced an enquiry report quantifying alleged loss and outlining administrative deviations, and the Special Court (Anti-Corruption Bureau) issued summons to accused Nos. 2 to 7, including the present appellant.

The appellant maintained that the allotments were intended to benefit tribal and marginalised communities under a fisheries policy approved by the Cabinet and that there was "not even an iota of material" to allege demand or acceptance of bribe by him. Counsel relied on the Constitution Bench decision in Neeraj Dutta v. State (NCT of Delhi) to submit that direct proof of demand and acceptance (or permissible circumstantial proof) was necessary before the statutory presumption could be invoked. The High Court had earlier refused discharge but had left liberty to seek discharge after pre-charge evidence; on appellate review the Supreme Court examined the investigation report, pre-charge statements and the Special Court's treatment of evidence.

The Supreme Court found that the Special Court and the High Court had not specified material showing demand or acceptance by the appellant and had not engaged with the pre-charge evidence; the investigation report contained allegations of misuse of authority and quantified financial difference but did not establish the elements of bribery against the second accused. The Court held that a mere policy deviation or administrative irregularity did not substitute for proof of demand/acceptance required under Sections 7 and 13, and that the presumption under Section 20 could not be raised on the present record. The appeal was allowed and the proceedings against the second accused were directed to be dropped; no comment was made to govern any trial against the first accused.

Case No.: 2025 INSC 280 Case Title: Dileepbhai Nanubhai Sanghani v. State of Gujarat & Anr. Appearances: For the Petitioner(s): Shri Mukul Rohatgi, Senior Counsel For the Respondent(s): Shri Iqbal Syed, Senior Counsel (for complainant/respondent); Ms. Swati Ghildiyal, Counsel (for State)